In Canada we did not have many no-frill banks. Most of the institutions charged us to maintain a bank account. Probably one of the reasons was – too little competition in this country. When we were expecting more choices in the personal banking market – ING challenged the big Canadian banks by offering their no fee banking account.
The fear:
ING gave us the option to get a no-fee bank account. We do not want this to become another sold-out discount cell phone service provider.
In past We saw that the companies offering unlimited calls ended up in the bigger rivals pockets and the offers slowly disappeared. ING should not end-up in that row.
This foreign Schedule II bank has already attracted interest of many potential buyers. A report suggested that ING is the eighth biggest bank in Canada. It has about C$40 billion in deposits and assets in Canada.
Bit of history:
ING offers mortgage directly and also using broker channel. This on-line only bank charges no fees on personal deposit or chequing accounts. It also offers attractive interest rates on deposits. Started in 1997, slowly but surely ING is gaining momentum in Canada.
INGs parent company, ING Groep NV, a Dutch financial-services, is taking serious hits on its earnings due to financial troubles and write downs in Europe. Now it is looking for ways to raise funds.
Who are interested?
Canadian banks are always looking for opportunities to grow. Having limited scope inside the country they looked outside the border and beyond. This sale brings them a good opportunity of growth in Canada. A number of reports suggest that there are some serious bidders for the bank.
The possible effects:
The changes brought in by ING have already gained momentum in Canada. PC Financial, BMO-Sobeys are the proofs of that fact. It is unlikely that this sale will bring in any change in the discounted retail banking in Canada. We have to see what the regulator has to say in this matter.
The broker channel will lose another good lender. Options will shrink but brokers still have number of lenders actively supporting and growing with the broker channel.
